Children with many experiences with stories:
A-can accurately sound out words.
B-tend to know stories have predicitable segments and features
C-can read simple words as was or am by late preschool years.
D-realize words are separated in sentences and that sentences end in periods.

What awnser do you think is correct? I think that C is the most correct.

C is not correct. Early readers learn words they can sound out in syllables, am, are, is comes later.
D is ridiculous. It is not unusual to find older kids who have not realized what a sentence is, they speak and read in sentence fragments.
B. Can be true if stories have been read with a professional teacher, using focused questions in the pre and post reading periods. But most often, even with early childhood teachers, they don't do that, even it it is their job. Research on Directed Reading Activities (DRA) model is solid on improving reading comprehension.
A. "accurately"? Only the Phonics advertisments on TV state this.

So the best answer? Probably your text or instructor wants you to think B is always true, and it is very effective on comprehension, if you do DRA activities when reading.